Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, said at the Financial Street Forum annual conference held in Beijing on November 8, 2023. Photo: Courtesy of the Financial Street Forum

China is expected to achieve its annual GDP growth target of about 5 percent this year, based on the expansion of 5.2 percent in the first three quarters, Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, said at the Financial Street Forum annual conference held in Beijing on Wednesday.

The IMF recently raised forecast for China's GDP growth to 5.4 percent this year, which means the country's projected growth rate remains well above the levels of other major economies, Pan said.

His comments added to the confidence expressed by Chinese officials and economists about the world's second largest economy achieving the annual target, refuting Western media hype of an economic "crisis" facing the country.

Since the start of the year, there have been twists and turns in China's economic recovery path due to external complexity and internal challenges stemming mainly from a stagnant real estate sector and weak demand.

With macro policies taking effect, China's economic growth is gathering momentum, marked by pick-ups in production and consumption, along with employment and consumer prices that have generally improved, as well as the balance of international payments, said Pan.

Official data released in October showed China's third-quarter GDP growth came in much stronger than expected at 4.9 percent.

The fourth-quarter growth rate is widely expected to reach at least 5 percent, considering the lower comparison base of 2.9 percent in the final quarter last year. 

Domestic consumption contributed 83.2 percent to economic growth in the first nine months of the year, becoming a major driving force, according to the National Bureau of Statistics.

"China has the fundamentals to maintain stable economic operations and consumer prices," the governor said.

There are two key factors for China's economy - one is the large size and the other is the balance between the growth rate and the quality and sustainability of growth, Pan noted.

China's GDP exceeded 120 trillion yuan in 2022. Against the backdrop, a growth rate of about 5 percent is already a high rate, he said. 

"Our country's economy needs a reasonable growth rate, but what is more important is to achieve high-quality, sustainable development. Transforming the economic growth model is more important than pursuing high growth rates," Pan said.

Recently, a number of domestic investment banks have published their outlooks for China's economy in 2024. Next year's real GDP growth is likely to reach around 5 percent, and the recovery will be neither slow nor too fast, but it will keep accelerating, investment bank CICC said in a report.

The additional 1 trillion yuan in special treasury bonds approved last month demonstrated the central government's resolve to increase countercyclical policy adjustment, the CICC said.

The bond issue means that investment growth momentum is expected to pick up in the first quarter of 2024, Huatai Securities said.

Half of the proceeds are to be used this year and half in 2024, which means that the effects of pro-growth policies will last at least through the first half of 2024, and the economy's inherent growth impetus will be rejuvenated, Wang Qing, chief macro-economic analyst at Golden Credit Rating International, told the Global Times.

Global Times